The Central Bank of Brazil has been said to consider regulations for the FinTech sector this year to help companies and start-ups in the field expand in the current situation of recession in the country.

Director of the Central Bank of Brazil, Otavio Damaso, told Reuters that the growing number of fintechs are “very positive” for the efficiency of Brazil`s financial system.

The recession in the country has left millions unemployed. Also, Brazilian customers are reportedly paying some of the highest interest rates among major economies.

The fintech companies in Brazil have appeared to provide cheaper loans and more accessible services that challenge the monopoly of the local banks.

“I believe there is room for further expansion of credit fintechs”, Damaso commented.

“And new regulations would pave the way for that development within a secure judicial framework”, he added.

If the new rules are introduced, fintechs could more easily team up with banks to offer loans that provide securitized credit from institutional investors, and “peer-to-peer” lenders would be able to connect borrowers directly with individual investors, elaborated Damaso.

While details are not disclosed to the public, some of the new regulations will assist financial technology companies and start-ups in some of the following areas:

A wider playground, by facilitating foreign banks to enter Brazilian shores without the need for a presidential decree

Diversification, by helping financial technology companies team up with banks to offer loans or “securitized credit from institutional investors.”

Brazil`s “big four” banks are now holding 72.7% of all assets of the country`s commercial financial institutions. Therefore, it is opinionated that there is a need for new financial lenders that are cheaper and more efficient, especially in times of a recession.